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NEW QUESTION: 1
When a client purchases a variable contract through you, he should be informed that his money will be
invested:
A. at the most recent price for which the contract sold.
B. in a product with a guaranteed cash value.
C. at the next price that is computed after the contract application is accepted by the insurance company.
D. at the previous day's close price for the contract.
Answer: C
Explanation:
When a client purchases a variable contract, he should be informed that his money will be
invested at the next price that is computed after the contract application is accepted by the insurance
company. It is the responsibility of the member firm to transmit both the contract application and the
payment to the insurance company promptly. Variable life insurance policies do not have guaranteed
cash values. The cash value fluctuates with the performance of the underlying portfolio in which the
insurance company invests the money.